Asia stocks hit by tech sell-off, Nikkei falls after weak trade data

Updates at 00:00 ET (04:00 GMT) with India open, Japan and HK stock moves

Investing.com-- Most Asian stocks moved in a flat-to-low range on Wednesday, with technology shares logging steep losses in tandem with their Wall Street peers, while Japanese markets extended a fall from record highs on soft trade data. 

Regional markets took weak cues from a negative overnight session on Wall Street, as optimism over a Russia-Ukraine peace deal ran dry and as investors locked-in recent profits in tech shares.

S&P 500 Futures fell 0.2% in Asian trade, with focus remaining on an upcoming address by Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium.

Tech shares slide tracking Wall St; Japan, S.Korea worst hit 

Asian tech shares were the worst performers for the day, with bourses in Japan and South Korea among the biggest decliners. Japan’s Nikkei 225 and TOPIX indexes fell 1.5% and 0.6%, respectively, while South Korea’s KOSPI slid 1.8% to a 1-½ month low. 

Tech conglomerate SoftBank Group Corp. (TYO:9984) was among the worst performers on the Nikkei, sliding over 8%, while memory chip maker SK Hynix Inc (KS:000660) slid 3.8% and was among the top weights on the KOSPI. 

Tech shares fell tracking steep overnight declines in their U.S. peers, which were in part hit by profit-taking after a strong run-up through August. Artificial intelligence major Nvidia (NASDAQ:NVDA) lost 3.5% and led losses among Wall Street’s so-called Magnificent Seven group. 

Tech was also spooked by speculation over the U.S. government taking equity stakes in chipmakers who received funding under the CHIPS Act. 

Reuters reported that Washington was considering stakes in chipmakers such as Samsung Electronics Co Ltd (KS:005930) and TSMC (TW:2330), after it earlier this week announced plans to take an equity share in beleaguered chipmaker Intel (NASDAQ:INTC). 

TSMC’s Taiwan shares tumbled 3.8%. 

Uncertainty over U.S. interest rates also pressured tech shares, given that they had logged strong gains on increasing confidence that the Fed will cut rates in September. But recent economic data raised some doubts over this notion. 

Japanese trade data underwhelms

Losses in Japanese bourses– which saw them fall further from recent record highs– also came in the wake of much weaker than expected trade data for July.

Japan slipped into an unexpected trade deficit as the country’s exports shrank more than expected in July. This came as local exporters grappled with high U.S. trade tariffs and weakening export demand in China. 

While the U.S. did lower its duties on Japanese goods to 15% in August, it remains to be seen whether a trade deal with Washington will help Japanese exports recover. 

Chinese stocks upbeat as PBOC leaves interest rates unchanged

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose about 0.4% each, while Hong Kong’s Hang Seng index fell 0.3% on losses in tech.

Chinese bourses benefited from investors pivoting into non-tech sectors, a trade that also benefited Australian shares. The ASX 200 rose 0.5% and was close to a record high. 

In Hong Kong, Xiaomi (OTC:XIACF) Corp (HK:1810) shares fell 0.3%, less than their regional peers as the tech giant clocked stellar earnings for the second quarter. 

Baidu (NASDAQ:BIDU) Inc (HK:9888) and China Resources Power Holding (HK:0836) fell 1% each, while AIA Group Ltd (HK:1299) shed 0.8%, with all three set to report earnings in the coming days. 

The People’s Bank of China on Wednesday kept its benchmark loan prime rate unchanged as widely expected, with Beijing seen doling out more fiscal stimulus over loosening monetary policy.

Positive trade ties between the U.S. and China also aided local stocks, as did speculation over a Russia-Ukraine peace deal. Such a deal could see the U.S. tone down its scrutiny of Russian oil purchases by China and India.

India’s Nifty 50 index fell marginally at the open, with the index seen running out of steam after rising sharply on the prospect of a Ukraine-Russia treaty. India faces 50% tariffs on its U.S. exports, as Washington decried New Delhi’s continued purchase of Russian oil.

Analysts warned that higher U.S. trade tariffs and potential disruptions in oil supplies could greatly undermine Indian economic growth, especially as negotiations with the U.S. stalled. 

Singapore’s Straits Times index rose 0.3%.